Last mill standing in Grant County struggles to stay busy

The Last Mill in Grant CountyAt one time in Grant County there were enough saw mills to provide work for nearly anyone who wanted it. Today there is only one left, Malheur Lumber Company in John Day. Seventy-five people work there and wonder if they're headed towards the same end as the other mills.

JOHN DAY -- Down on the canyon floor, near the tree line's edge, amid the sawdust and scrap, the last mill in Grant County is barely holding on.

The housing boom is gone bust, and the economy is in the hole. But the killer for Malheur Lumber Co. may be a lack of logs, though the ponderosa pines that powered this region for a century grow thicker now than ever before.

"We were having a tough time before getting enough logs," says Mike Billman, the mill's timber manager. "Now it's even tougher."

In eastern Oregon, a paradox -- lots of trees, not enough logs to feed the mills -- shapes the natural and economic landscape.

Jamie Francis/The OregonianLogs run through a processing machine at Malheur Lumber Co. in John Day. Lumber mills have been the backbone of Grant County for as long as most anyone can remember.

Over 20 years, federal logging restrictions allowed forests to flourish but starved commerce, creating a problem of uncertain timber supply in areas dominated by public lands.

Now, private landowners have also quit feeding the mills as prices have collapsed.

The recession only piles on the pain at Malheur Lumber, where a near-empty log yard spells trouble for 75 workers. The mill could be next to fall in an economy that has toppled loggers, wood-products makers and mills across the state.

"We've had multiyear losses," says John Shelk, managing director of the Ochoco Lumber Co. in Prineville, Malheur's parent company. "We have a real strong feeling for the John Day community. We feel an obligation to keep the mill open if possible." But the prospect of extinction for the timber industry in Grant County is real, rippling beyond the mill.

Rural leaders wonder how they will keep their communities alive. Residents mourn the passing of a way of life. Environmentalists, who once opposed logging in public lands, now fear overgrown, insect-infested forests have become a tinderbox.

Without mills and people who know how to work in the woods, public forestlands suffer, says Diane Vosick, restoration program director for the Nature Conservancy.

So far, Malheur Lumber has muddled through tough times, filling orders it wouldn't have sniffed at a year ago. Leftovers from a fire salvage sale may keep it going through July.

But the mill is running out of logs -- and choices.

"The only other option is to close down and walk away," Billman says. "We hope we've hit the floor and we're headed up."

Timber's fading presence

Soaring pines dot the high desert of Grant County, home to 6,900 people and 1.7 million acres of forest. The federal government owns about 66 percent of all the county's land.

Each year, the U.S. Forest Service puts out contracts for companies to bid on timber from public land. But competition is stiff, and mills rely on buying logs from private landowners, who now make up more than three-quarters of the state's total timber harvest.

Prices for an average ponderosa pine log fell from $500 for 1,000 board feet last year to less than $240 this year. At those prices, few landowners are willing to harvest.

"It's so bad right now, we don't even look at cutting," says Chris Heffernan, who owns 1,100 acres of pine near Baker City. "You're almost giving the logs away if you cut."

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As mills disappear, Heffernan struggles to find places to process logs. In 1992, four mills within 40 miles would bid for his logs. Today, the nearest mill is too far away to turn a profit since landowners pay for freight.

"If you are relying on your logs for income, it's a real problem now," he says.

The constricted supply inflames old tensions over federal logging bans, which halved Oregon's timber harvest over two decades. Although they protect wildlife and habitat, the restrictions, started in the early 1990s, have slammed eastern Oregon's resource-based economy.

"In eastern Oregon, more than in western Oregon, forests are publicly owned with no reliable sources of logs," says David Kvamme, spokesman for the Oregon Forest Resources Institute, a semi-independent state agency. "Without logs, those mills can no longer exist."

In a down economy, rural leaders say, those public lands are their only salvation from rampant joblessness.

In much of eastern Oregon, the federal government seems like an out-of-touch and distant landlord, says Mark Webb, the county's chief elected official. Here, the ruling arm of Washington, D.C., looms larger than that of lawmakers in Salem.

"These are federal lands and they need to be taken care of," Webb says. "But once you take 60 percent of our natural resources off the docket, you cripple us to the point we can't carry on."

Families leaving

Surrounded by canyons, juniper and sage, John Day is forged by isolation and nature. The woods brought the mills and the rivers irrigated the pastures for livestock.

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Not so long ago, residents recall a half dozen mills in the valley, providing steady family-wage jobs. John Day's quaint downtown, 80 miles from the nearest freeway, is home to the county's only stoplight.

People such as Jacob Wilson, who grew up here and started logging out of high school, have always headed for the pines to hunt, fish and make a living.

Wilson is accustomed to the cyclical lifestyle imposed by nature and the economy. Some years are up, others down. At age 35, sawdust runs through his veins.

But with the timber industry's decline, many families have left the area. And Wilson, who has two children, ages 13 and 16, may have to as well.

The Malheur Lumber Co. has kept the community afloat during good and tough times. Here, shiny American-made pickups still rule the road and tidy manufactured homes mix easily with historic ones.

"If the mill goes, that's when we'll really feel it," says Pete Teague, who owns the Dairy Queen, the city's most popular restaurant, which also acts as a local community center.

In Grant County, with mountainous canyons and terrain shielded by trees, there's no talk of wind turbine developments or solar projects. A biomass plant, a possibility that's in early stages of discussion, could still require a guaranteed timber supply from federal lands.

For many, the only option is to leave, and young people are doing it in droves. In the past eight years, Grant County's population has fallen by 12 percent.

"There's nothing to do here," says Josh Shaffer, 18, a senior at Grant Union High School with plans to leave for California. "There's no jobs. No one has any reason to stay here."

Preserving the forests

With the county's timber industry close to flickering out, salvation could come with help from the conservationists, federal agencies, contractors, ranchers and timber companies that have battled one another in years past over management of public lands.

Over two decades, a litigious tug-of-war over public forests barred not only commercial activity, but also healthy maintenance.

Today, there's agreement that the federal logging bans and lengthy lawsuits have had an unintended effect: allowing forests to become overgrown with brush and infested with beetles, making the forests in this region particularly vulnerable to fire, which wipes out possible timber resources and critical habitat.

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"The biggest threat to our social, economic and ecological communities is catastrophic fire," says Curtis Qual, the Forest Service's partnership and stewardship coordinator for the Malheur National Forest. "Not only are we going to have fires, we'll have bigger fires that are not just going to take out our environment, but maybe a town, too."

Conservationists and timber companies are now trying to collaborate on a more sustainable model for maintaining public forests, which will also have positive implications for rural economies.

Early this month, the U.S. Forest Service put out a bid for a $50 million five-year stewardship contract that would allow contractors to remove overgrown brush and trees from four national forests in eastern Oregon: Malheur, Umatilla, Wallowa-Whitman and the Lookout Mountain and Paulina ranger districts in the Ochoco.

The Nature Conservancy is one of a handful of environmental groups that has come to recognize the pitfalls of a disappearing timber industry. The group's Oregon chapter wants to make sure the Malheur Lumber Co. survives.

Without mills and loggers and others who know how to work in the woods, areas with large public forests would suffer ecologically and economically, says Vosick with the Nature Conservancy.

Forests need people who know how to thin trees, mills to create wood products and a market for the logs that are removed.

States such as Arizona hold lessons for Oregon, she says. In Flagstaff, Vosick worked to try to bring back mills after they had shut down. There, maintaining forests is prohibitively expensive for the Forest Service without a mill nearby to process the logs. Wood waste goes to landfills.

"Everyone left," Vosick says. "There's always going to be a need for woodworkers. That infrastructure is critical, and it's impossible to reinvest once it's gone."